Mortgage lates and going to underwriter for FHA loan ... ???

[shawneet]

Hi family ... hoping that you can shed some insight on this one. 

The LO says that she is putting us into an FHA loan ... mid scores for both me and hubby are 668 and 669 EQ (lender pulled 3-18-13) ... we look pretty good overall on the CRs ... one disputed account but it's closed (as of 2010) was a car loan but paid in full ... i had disputed some of the information they listed ... one CO back in 2011 for $500 ... original amt was $200 but with interest is now $500 (was a Target card) ... no other late payments on my CR ... there are 3 -30 day lates on my hubby's CR (it was one 30 day late that rolled into the next months ... our mtg co. was being transferred in the interim and it was a mess trying to contact them and relaying the info to reps who obviously were outsourced, etc.) Anyway ... the last reported late was of July 2012 ... so this July will be a year ... no other derogatory information on the CRs.  We bring in about 8k monthly ... make 93K per year ... home cost is 275,680...  what is the worst case scenario for us if the LO submits our file to underwriting now? Or can she actually hold the file until July or Aug before submitting it to underwriting?  We signed the FHA addendum docs on yesterday 4/30 ... house is being built so tentative closing is between Aug - October.  Ground hasn't even been broken yet ... What are your thoughts?

[tooleman694]

If you get submitted now

You will have a condition that you cannot close till July, since the house wont be done yet you will be ok.

[shawneet]

Thanks! That does give me some hope.  We were afraid that if she submits it now that we would just get a flat out "Denied" ... certainly didn't want that to happen.  The credit will look much better in 90 days and perhaps we should've waited a bit but we were trying to get the ball rolling in hopes that the timing would work out with back to school and closing for the newly built home, etc.  I just pray that we don't get denied. (the lender is Suntrust, btw, if that means anything).   I mean, would a LOE be needed as well even if the lates will be aged a year in July?  I have no problem writing one.  It was simply an oversight in the payment and then each payment after that (though on time) was being reflected as a late payment.  Finally it looked as though someone heard our cry in July and all was fine after that.  Our credit scores should also be much improved in July as well.  Hoping to have middles of at least 680 by then.  Keeping fingers AND toes crossed.  Thanks

[tooleman694]

We closed in April, and my last Mortgage late was in April 2012. We made it thru UW fine and they didnt even ask for a letter.

[shawneet]

Tooleman, you're giving me hope!! LOL  I pray that things go as well for us.  IMO, (and I'm far from being a LO) I would lend to us! LOL  We can afford the new house payment (along with our current mortgage, because we will be renting the current home so that payment had to be figured into our debts), my hubby has been on his job for 15 years, I'll be on mine for 2 in July (but same line of work for 7 years), and I already explained the credit scenario.  My only concern is if the lender will start to build prior to our loan being "approved" ... I think they will because the New Home consultant (from the builder) said that they have submitted our contract to their processing dept and then it goes to Architecture to have the blueprints drawn up.  Also, the lender that we're working with is a preferred lender of the builder. So, please send up some prayers for us that all goes well.  I will surely keep everyone posted on the process!

[tooleman694]

We went thru the same thing, had to get UW approval back last year before they started building. At the time the Mortgage late was 6 months old. I was approved with a condition we could not close till April =)

[shawneet]

So glad that things went well for you and finally closed and got that ordeal over with!! Now you can get on with enjoying your new home.  I surely do hope that all goes as well for us.  If your late was 6 months old, did your builder wait 6 months before they started building or did they go ahead and start because they knew that you would be okay (approval-wise) by the time the home was finished?

[tooleman694]

Since it takes about 6 months to build, they went ahead with the building because they knew we would be able to close.

[shawneet]

I'm thinking that will be the case with us.  In the development where we're building, they are really on the ball with the construction.  But the consultant told us that there were a couple of houses scheduled before us and that one or two of them (building plans) are still sitting with the City, waiting to have the building permits granted.  So, she says that it may take a minute before we see any movement then once the City grants the permit, then it takes about 120 days to build.  So, I'm just praying that the approval comes thru (and with minimal conditions) then I believe that I'll have no problem on the building time (the longer the better) ... gives us a chance to save more money and raise the scores even higher!  If we were denied (and I'm not claiming that at all) is there a waiting period that's required before we can apply FHA again?

[tooleman694]

No waiting period but you need a new address.